Google Ads is one of the most popular and effective online advertising platforms available. Google Ads can drive targeted traffic, generate leads, and increase sales for businesses of all sizes. But how exactly does it work? In this comprehensive guide, we’ll give you an overview of how Google Ads works to help you create optimized, high-performing campaigns.
An Overview of Google Ads and How it Works
Google Ads is Google’s advertising program that allows businesses to display text, image, shopping, mobile app, and video ads across Google’s search, display, and video network. Google Ads ads appear on Google Search, Maps, YouTube, Google Display Network, and more. You even see Google Ads in your Gmail inbox. The platform uses a combination of your objective, campaign type, targeting, ad type, budget, and your bid strategy to determine where to run your ads to drive the best results. For example, an advertiser who creates a search campaign to drive sales and bids on the keyword “basketball hoops” will enter auctions against other advertisers who are targeting the same keyword. The cost for the advertiser will be based on the overall competition for that keyword.
How Google Ads Works Video
How Google Determines Which Ads to Show
Google uses a combination of factors to determine which ads appear for any given search query or website visit. These include:
Advertisers bid on specific keywords relevant to their business. The higher the bid, the more likely their ad will show for that keyword.
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Ad Rank Formula
Ad rank is calculated based on bid amount + quality score. The quality score is based on expected clickthrough rate, ad relevance, landing page experience. Higher quality scores improve ad rank.
Every time a query is entered, an auction runs behind the scenes. Google evaluates all eligible ads’ ad ranks and displays the winners in descending order.
Ads can be targeted to specific locations, audiences, devices, categories and more to improve relevance. Google rewards more tightly targeted ads with better ad ranks.
How The Google Ads Auction Works
Basic Guide to Setting Up a Google Ads Campaign
Follow these steps to launch an effective Google Ads campaign:
1. Set Your Campaign Objective
First, decide what you want to achieve – do you want more sales, leads, website traffic, phone calls, store visits, or awareness? Different campaign types are optimized for different goals. The very first thing you do when you create a campaign is set your objective.
2. Determine Your Monthly Budget
When you set your monthly budget, you want to divide it by 30 and use that for your daily budget. Decide your monthly budget based on your overall objective. Low budgets can limit your overall volume, but you don’t want to set your budget so high that your campaign isn’t profitable. You can use shared budgets in Google Ads as well.
3. Choose Your Bidding Strategy
Google offers automated bidding strategies tailored to campaign goals, like target return on ad spend or target cost-per-conversion. This simplifies optimization.
4. Organize Keywords
Conduct thorough keyword research and group similar keywords into themed ad groups around topics or products. This improves relevance.
5. Create Compelling Ads
Write clear, concise ads with attractive call-to-action text. Conduct A/B testing on ad copy and design. As long as you are using conversion tracking, Google Ads will optimize your ads automatically and serve your top-performers. You want to create new advertisements every single month to increase performance.
6. Drive Traffic to Relevant Landing Pages
Send traffic to landing pages that directly relate to your ads. Provide a clear path to conversion from landing page.
7. Monitor and Optimize Performance
Analyze performance data, then refine targeting options, bids, keywords and creatives over time to improve results.
Benefits of Understanding How Google Ads Works
The most important parts of Google Ads include setting up conversion tracking and creating optimized campaigns. Conversion tracking allows you to create campaigns that focus on your Key Performance Indicators. Optimized campaigns will drive your company revenue.
- Increased website traffic and brand awareness
- More leads and sales driven by ads
- Improved return on ad spend over time
- Optimized campaigns that can drive results all year long
- More refined targeting can drive more targeted leads
- Valuable customer insights from analytics and conversion tracking
Why Advertisers Should Test Google Ads:
- Increased visibility – Your ads can appear on the world’s most popular search engine and other Google properties.
- Targeted reach – You can target your ads by keyword, location, audience, and more.
- Measurable results – Google Ads provides real-time data on impressions, clicks, conversions, and other metrics.
- Flexible budgeting – You can set a daily maximum budget and only pay when someone engages with your ad.
- Automated optimization – Google Ads AIs analyze your campaign data and automatically optimize targeting and bids.
Google Ads is a vital tool for growing your business online. While it’s not for every single business, a lot of local companies, Ecommerce companies, software companies, and more should at least test a Google Ads campaign. Follow these best practices to get started and fully leverage Google’s massive advertising network.